The Federal Housing Finance Agency (FHFA) Home Affordable Refinance Program (HARP) is designed to assist borrowers who have demonstrated an acceptable payment history on their existing Fannie Mae mortgage loan, but may not have been able to refinance to obtain a lower payment or move to a more stable product. Only Rate/Term Refinance transactions are eligible (E.G. Limited cash-out refinance) paying off the existing first FannieMae mortgage, financing of closing costs, and no more than $250 cash back to borrower. FannieMae loan look up table: www.fanniemae.com/loanlookup is provided for reference purposes only. DU will determine if the existing loan is eligible for the program. The existing loan must have been owned or guaranteed by FannieMae prior to June 1, 2009. Refer to Eligibility topic for additional requirements. Effective the weekend of March 17, 2012, DU Refi Plus findings will be enhanced with greater flexibilities as stated in FannieMae SEL2011-12 and DU release notes. This product guide will be effective March 22, 2012 for ExpressLoan DU Refi Plus findings obtained on or after March 19, 2012 This product guide is applicable to DU Refi Plus loans whose findings where obtained on or after March 19, 2012. Please note: There are two separate product matrices A and B. The higher LTVs are stated on Matrix A and are only permitted for the 20 and 30 year Fixed Rate products. Matrix A, T304RP, and T300JRP ONLY 1 PRIMARY RESIDENCE Rate & Term Refinance LTV w/ DU REFI PLUS APPROVE for findings on or after 3/17/2012 2 Property LTV w/o CLTV Fico score Type Secondary Fin. 3 Secondary Fin. 1 Unit SFR or PUD 120 120 Unlimited 620 2-4 unit or Condo 105 105 110 620 SECOND HOME Rate & Term Refinance 1 105 105 110 680 INVESTMENT PROPERTY- Rate & Term Refinance 1-4 105 105 110 680 1 Please refer to Matrix B for other eligible products 2 Eligible only with Accept/Eligible DU Refi Plus findings NOT requiring M.I. and specific loan terms. Refer to specific topics for details 3 Subject to Geographic State Restrictions Note: while DU findings may indicate higher LTV/CLTV findings, these parameters must be met. DURP product guidelines, T301RP, T304RP,, A342RP,, T300JRP and A341JRP 1
LTV w/ MATRIX B T301RP,, A342RP,, T301JRP* and A341JRP Products 1 PRIMARY RESIDENCE Rate & Term Refinance DU REFI PLUS APPROVE 2 Property LTV w/o CLTV Fico score Type Secondary Fin. 3 Secondary Fin. 1-4 105% 105% 110 620 SECOND HOME Rate & Term Refinance 1 105% 105% 110 680 INVESTMENT PROPERTY- Rate & Term Refinance 1-4 105% 105% 110 680 1 Please refer to Matrix A for 20 and 30 year Fixed Rate products 2 Eligible only with Accept/Eligible DU Refi Plus findings NOT requiring M.I. 3 Subject to Geographic State Restrictions Note: while DU findings may indicate higher LTV/CLTV findings, these parameters must be met DURP product guidelines, T301RP, T304RP,, A342RP,, T300JRP and A341JRP 2
APPRAISAL REPORTS Standard SPM appraisal policies apply unless appraisal documentation waivers are permitted on DU findings. Appraisal documentation waivers: o Fannie Mae Index Property Valuation Options - Not permitted o PIW: Permitted if DU finding allows. As a FYI: PIW findings will NOT be issued for 2-4 unit properties o DU will indicate type of fieldwork recommendation required, and if applicable, that a fieldwork waiver is permitted. Follow DU recommendation for property valuation with the following exceptions: PIW may not be exercised if there is reason to believe fieldwork is warranted based on additional information obtained or subsequent events such as hurricane or other natural disaster, or based on additional information provided by DU regarding the subject property for these loans. In these situations the minimum level of property fieldwork as specified by DU must be ordered. Owner-occupied properties in Kansas with an LTV exceeding 100% require a full appraisal report Owner-occupied and second home properties in West Virginia require a minimum of an Exterior Only Appraisal Report (Form 2055) unless DU recommendation requires an Interior and Exterior Appraisal Report (Form 1004) UW must disregard Core Logic s valuation findings when PIW is utilized: SPM is not required to rep & warrant property valuation or condition. DU will waive the requirements of an appraisal or exterior-only property inspection for a fee of $75. Furthermore, the DU Refi Plus Property Inspection Waiver (PIW) may only be exercised if: The final submission of the loan case file to DU resulted in a property fieldwork waiver offer; and The property fieldwork waiver offer is not more than four months old from Note date. o For reduced eligible appraisal transactions: DU will issue two property fieldwork recommendation messages: The first message will indicate that the loan case file is eligible for the property fieldwork waiver. The second message will indicate the minimum level of fieldwork required if the lender does not elect to exercise the property fieldwork waiver when delivering the loan to Fannie Mae. ARM Products Margin: Libor Index: 2.25% Life Floor: The life floor will never be lower than the margin Index: Libor Index = the average of interbank offered rates for one year in U.S. dollar-denominated deposits in the London market (Libor) as published in The Wall Street Journal. Payment Adjustment Date: First payment change date is the 1 st mo. following the interest-rate adj. and every 12 mos. thereafter. Life Cap: 5/1, 7/1 & 10/1-5% over the Note Rate. Interest Rate Adjustment Cap and Date: o 5/1 ARM: Interest rate is fixed for the first 60 months. The maximum interest-rate adjustment at the first adjustment date is 5% maximum first-time adjustment. Thereafter the interest rate adjusts annually with a maximum interest-rate change of 2%, which will not cause deferred interest. o 7/1 ARM: Interest rate is fixed for the first 84 months. The maximum interest-rate adjustment at the first adjustment date is 5% maximum first-time adjustment. Thereafter the interest rate adjusts annually with a maximum interest-rate change of 2%, which will not cause deferred interest. o 10/1 ARM: Interest rate is fixed for the first 120 months. The maximum interest-rate adjustment at the first adjustment date is 5% maximum first-time adjustment. Thereafter the interest rate adjusts annually with a maximum interest-rate change of 2%, which will not cause deferred interest. Note: The interest rate must always be rounded to the nearest 1/8 th of 1% (0.125%) o Qualification: 5/1 ARMS qualify at the greater of Fully Indexed or Note Rate +2 %. 7/1 & 10/1 ARM: Qualify at the Note rate. ASSUMPTIONS Not allowed DURP product guidelines, T301RP, T304RP,, A342RP,, T300JRP and A341JRP 3
AUTOMATED UW Benefit to Borrower Borrower Eligibility Cash Back Limitation Cash Resv./ Assets Condo/PUD Approvals Approve/Eligible: ExpressLoan DU REFI PLUS Approve/Eligible Finding dated on or after 3/19/2012 is required. o Du finding will state the following message: This loan case file was underwritten according to the DU Refi Plus expanded eligibility guidelines offered on certain limited cashout refinance loan case files where the borrower s existing loan is identified by DU as a Fannie Mae loan. This loan case file must be delivered with Special Feature Code 147. o Acceptable DU findings MUST specifically state that Mortgage Insurance Is NOT required E.G. Mortgage insurance is not required for this DU Refi Plus loan case file. If the loan does NOT receive this M.I. message, then loan must be re-submitted to DU as a Rate/Term Refinance -Standard Accuracy of both the Borrower and Subject Address input is required. o DU will match Borrower(s) Social Security Number(s) associated with the FannieMae loan. Refer to Vesting Topic for applicable criteria o FannieMae guidelines for entering correct standardized property address (including applicable unit number) must be followed. LTV/CLTV/FICO requirements must be met as stated in applicable product matrix regardless if findings permit a higher LTV/CLTV. DU cannot determine if the following requirement is met, therefore, the UW must represent and warrant that the borrower is receiving a benefit from refinancing. The following requirements apply: o A reduced monthly mortgage principal and interest payment; or o A reduction in the interest rate, or o A reduced amortization term, or o A more stable mortgage product (i.e., replacing an Adjustable-Rate Mortgage (ARM), Interest-Only Mortgage or a Balloon/ Reset Mortgage with a Fixed Rate Mortgage.) See Vesting requirements Permanent Resident : o If the borrowers on the new loan are the same as the borrowers on the existing loan, no verification of residency status required o If the borrowers on the new loan are not the same as the borrowers on the existing loan are not the same, SPM residency policy applies Non-Permanent Resident: o If the borrowers on the new loan are the same as the borrowers on the existing loan, no verification of residency status required o If the borrowers on the new loan are not the same as the borrowers on the existing loan are not the same, SPM residency policy applies The borrower may receive cash back at closing of no more than $250.00 Any excess cash representing the difference between the estimated and the actual payoff of the original loan plus closing costs and prepaid fees that is more than $250 must be applied as a principal curtailment to the new mortgage or a reduction in the actual loan amount. Fannie Mae policy B5-5.1.08 applies As per DU findings Condo or PUD project reviews: Not required. Limited Reps & Warrants: UW is required to represent and warrant: o Property is not in a condominium hotel or motel or cooperative hotel or motel. o Property is not in a houseboat project or a timeshare or segmented ownership project o Insurance requirements are met While project review is not needed, if an appraisal report is obtained, and indicates the subject project consists of an in-complete conversion and/or there is a presence of a rental office for unconverted apt. units, the project will not be eligible for DU Refi Plus regardless of DU findings. Condo/PUD type: Condo type V and PUD type E must be selected and accurately reflected on 1008 DURP product guidelines, T301RP, T304RP,, A342RP,, T300JRP and A341JRP 4
CREDIT ELIGIBILITY FOR EXISTING LOANS ELIGIBILITY FOR NEW DURP LOANS ESCROW WAIVERS DU will not apply FICO score requirement for DU Refi Plus. UW must ensure the minimum FICO score requirements are met as stated on applicable Product Matrix o 0 x 30 day Mortgage late history in the past 12 months o Bankruptcy discharge must reflect at least 48 months since discharge. Multiple Bankruptcies in the last 84 months are not allowed o Foreclosure: 84 months since discharge Existing DU Refi Plus loan program eligibility criteria: DU will determine if existing loan is eligible for DU Refi Plus feature. Factors for eligibility consideration involves a combination of various factors including, but not limited to: o Existing FannieMae loan with Note date prior to June 1, 2009 o Borrower s Soc. Sec. Number and property address matching Existing loans that are not eligible for DU Refi Plus include (E.G. will not receive DU Refi Plus Eligible findings) but are not limited to: o Loan has outstanding re-purchase request o FannieMae loans with Note date on or after June 1, 2009 o Any loan not currently owned by FannieMae Please refer to FannieMae FAQ s for additional information New DURP loan eligible: o All DURP requirements herein stated must be met including, but not limited to Acceptable DU Refi Plus and ExpressLoan findings, applicable MI messages, LTV/CLTV parameters, credit, income, appraisal and documentation criterion. o The new loan amount must meet Rate/Term Refinance (E.G. Limited cash-out refinance) criteria: ONLY paying off the existing first FannieMae mortgage, plus financing of closing costs, and no more than $250 cash back to borrower The UW must enter only the balance of the first mortgage being paid off with the new transaction on line d., Refinance of the Details of Transaction section of the loan application. This amount must match the balance of the mortgage being paid off, as shown in the liabilities section of the loan application. Escrow shortages, delinquent property taxes, delinquent HOA dues etc. may NOT be included in the loan amount Refer to FAQ dated 12-20-2012 and FannieMae policy guide for a specific information New DURP loan ineligible: o Any loan not meeting eligibility criteria herein stated o Loan products not specifically listed as being eligible, including but not limited to: 10 Year Fixed Rate, & 3/1 ARM o Loans secured by properties not eligible for SPM financing include, but not limited to: Florida Condo s, Coops, Manufactured Homes, etc. Not available at this time. Standard SPM Escrow/Impound policy applies. DURP product guidelines, T301RP, T304RP,, A342RP,, T300JRP and A341JRP 5
INCOME DOC REQUIREMENT. GEOGRAPHIC RESTRICTIONS Income doc waivers: Not eligible. Minimum income doc requirements are: (A) Salary/Bonus/Overtime: Most recent W-2, One current paystub and a verbal VOE (B) Commission/Self-Employed: One year s federal income Tax Return. o Verbal Verification of Employment policies apply o Rent income used for qualifying: Standard FannieMae documentation. o For all investment properties AND all 2-4 unit primary residences, when rental income is not used to qualify, the gross monthly rental income for each unit in the subject property must be documented for reporting purposes with one of the following: Form 216: Operating Income Statement for investment and 2-4 unit owner occupied properties (including those in which the Borrower occupies one of the units as a principal residence), or Form 1007: A Single Family Comparable Rent Schedule for one-unit investment properties or Small Residential Income Property Appraisal Report Form 1025 or Current Lease Agreement(s) or If the property is not currently rented, an opinion of market rents provided by the appraiser or Brw prepared gross monthly rent being charged or to be charged for the property. Monthly rental amounts must be stated separately for each unit. The disclosure from the Borrower must be in the form of: A written statement from the Borrower or An addition to the loan application Website information documenting market rents must accompany Borrower statement All income must be validated with processed #4506. Another #4506 is required at closing Geographic restrictions may apply. Please refer to the Geographic Restrictions posted on SPM website. As a reminder: o Texas (a) (6) loans are not eligible for DU Refi Plus. o Appraisal/PIW restrictions apply for properties located in the states of Kansas and West Virginia. Please refer to appraisal topic. Loan Term MAXIMUM FINANCED PROPERTIES MAXIMUM LOAN AMOUNT MORTGAGE INSURANCE NON OCCUPANT CO- BORROWERS Loan Terms are only available as stated in the project header at the top of the page. There is no 25 year fixed rate term available. If subject is owner-occupied: No Limit Second Home or Investment: Maximum of 4 financed properties Standard: Subject to standard Fannie Mae loan limits High Balance/Jumbo: Subject to current High Balance/ Jumbo loan limits regardless if original FNMA loan was originated at a higher loan amount that was permitted at that time. For LTV >80 %: The DU Refi Plus eligibility findings MUST specifically state that Mortgage Insurance Is NOT required. (E.G. Mortgage insurance is not required for this DU Refi Plus loan case file. ) Loans requiring MI are not eligible: if the loan does NOT receive this M.I. message, then loan must be re-submitted to DU as Rate/Term Refi-Standard Non-occupant co-borrowers are permitted OCCUPANCY All occupancy types are eligible. Please refer to matrix for LTV/CLTV. Non-Owner Occupied Properties/Investment: The gross monthly rent for each unit in the subject property for investment and all 2-4 unit Primary residences must be documented even if Borrower is not using rental income to qualify. PREPAYMENT PENALTY None DURP product guidelines, T301RP, T304RP,, A342RP,, T300JRP and A341JRP 6
SUBORDINATE FINANCING VESTING Existing financing is permitted subject to CLTV parameters stated in matrix New subordinate financing and/or paying off existing subordinate financing with loan proceeds is not allowed. Payoff of existing subordinate liens from the borrower's own funds is allowed. o Re-subordination of existing subordinate financing is allowed, (excluding existing subordinate mortgages from municipalities for downpayment assistance programs) o DU findings must be met Refer to Fannie policy for additional information Borrowers on the existing mortgage must match the borrowers on the new mortgage (DU matches SSN) except as follows: o A new borrower may be added to the new loan, provided the existing borrower(s) is/are retained. An existing borrower may be removed provided: o Remaining Borrower(s) must provide evidence that the payments on the existing mtg. was made from their own funds for the most recent 12 mos prior to the origination of the new mortgage. o This 12 mo. payment history must be for the existing mortgage only it may not be satisfied using multiple consecutive mortgages. o If Borrower is being removed due to death, the 12 mo. payment history is not required; however, remaining Borrower must provide evidence of the deceased borrower's death. DURP product guidelines, T301RP, T304RP,, A342RP,, T300JRP and A341JRP 7